Top 4 Payment Trends for payment providers in 2022
Payment providers have been one of the few industries positively impacted by the COVID 19 pandemic as many merchants rush to sell their services online and turn to fintechs and payment gateways for money collection. Here are some important factors to consider while growing
Less single payment and more split payment
According to McKinsey, half of the global economy will be involved in joint consumption patterns, and the sharing economy will increase tenfold by 2025. Today, one of the hottest trends in the payment world is the Buy Now Pay Later schemes, offering consumers a way to own items and either do payment installments or simply delayed payments (typically for a fee or interest).
Splitting payments whether through installments or directly splitting the bill is an upcoming trend that many fintech have the opportunity to capitalize on.
“On the move” payment
With smartphone penetration across the GCC being one of the highest in the world, this presents a unique opportunity for consumers to pay in a fast and efficient way without the need for cards at all even. The onset of the COVID pandemic also increased significantly the use of contactless payment, where products such as Apple Pay and digital wallets also helped increase. This opened the door to many other secondary applications in the real world that enabled consumers to pay while on the move such as when paying for home delivery or at a drive thru by simply tapping the phone or the card. This is especially critical for small purchases which typically take very few minutes to prepare and pickup, enabling a much faster exchange of payment, and this trend is only going to grow, where fintechs and other commerce applications should be optimizing their solutions for.
Localizing the offering
The GCC comes across to many international companies as one entity, although that assumption in payments infrastructure and consumer behaviour is far from the truth. Payment providers and fintechs entering new markets need to consider the vast local preferences of consumers and availability of local payment methods. For example, about 70% of Japanese people use a computer to access the internet still in todays worlds, while Saudi has one of the largest mobile internet use in the world.
Localizing payments also means optimizing the customer journey to the local payment preferences. Taking the acquiring schemes that work in the UAE for example, where credit card usage is one of the highest per capita in the GCC at 89% according to Payfort, to a country like Kuwait where Knet is dominant debit method of payment instead, is a risky move. The rise of STC Pay in Saudi for example cannot be ignored by merchants and payment providers, and as they acquire more customers, they will be a dominant player in the market and any payment company operating in KSA would have to add them as a payment method.
Growing expectation for security features
3D secure is now slowly becoming the norm for all consumers, and many acquiring banks are also implementing it across their card portfolio by default. Although not all merchants have it required because it might affect basket checkout conversion rates, it is an important safety net that is also starting to become more expected by customers as they get used to the process. Such anti-fraud system or the equivalent of it for wallets is also going to be a growing trend in the payment industry in 2020 and beyond. This is especially critical for large amounts or cross border payments, and it is safer for both merchants and consumers alike.
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